Peterson Systems\' revenues for 2016 totaled $27.1 million. As with most compani

Question

Peterson Systems' revenues for 2016 totaled $27.1 million. As with most companies, Peterson is a defendant in lawsuits related to its products. Note 14 of the Peterson annual report for 2016 reported the following: 14. Contingencies has been incurred and an amount is reasonably estimable. Read the The company is involved in various legal proceedings... It is the Company's policy to accrue for amounts related to these legal matters If t is probable that a liablity equirements Requirement 1. Suppose Peterson's lawyers believe that a significant legal judgment against the company is reasonably possible. How should Peterson report this situation in its financial statements? First, let's decide how the lawsuit should be reported in the financial statements The lawsuit should

Explanation / Answer

the lawsuit should be disclosed in the notes to financial statements

since the Peterson believe that the lawsuit is reasonably possible hence the same will have no effect on financial statements , however it will be disclosed in the notes to the financial statements

the lawsuit should be disclosed in the notes to financial statements

since the Peterson believe that the lawsuit is reasonably possible hence the same will have no effect on financial statements , however it will be disclosed in the notes to the financial statements

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.